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Monday, 21 January 2013

Congestion pricing or using congestion as a policy

Alan Davies on Crikey writes about the Australian Professor on Global, Urban and Social Studies, Dr Paul Mees of RMIT (Royal Melbourne Institute of Technology), who is critical of road pricing because he believes that the reduction of congestion encourages motorists to drive further. He cites Vancouver as a city that has used congestion as a tool to encourage mode shift and discourage car commuting, although as Davies points out, Mees has not demonstrated a causal relationship between that professed policy and the reduction in commuting times that is reported for Vancouver. There could be a multitude of reasons for this around changes in land use patterns. Besides that, Vancouver itself is not happy with congestion as a sustainable policy tool, as is seen by its own consideration of road pricing, primarily to raise extra revenue but also driven by the objective to positively reduce congestion.

Dr Mees has a firm reputation amongst followers of the "New Urbanism" philosophy of transport and urban planning, and has been strongly critical of much public policy around transport in Australia. He adopts the familiar line that generally supports more publicly funded public transport and opposes increasing road capacity, because he sees this as a formula for long term behavioural change. However, he is unusual in also not being supportive of road pricing, because he believes that improving the standard of service for road users is a negative, in terms of encouraging mode shift and behavioural shift more generally. I have found that many advocates of increasing usage of public transport, walking and cycling tend to support more urban road pricing, for reasons that appear to be fairly obvious. However, it is worth examining his perspective.

This line of reasoning seems superficial, as of course any form of road pricing that charges for congestion, does two things that "just letting congestion get worse" does not do. For a start, if motorists have to consider the price of a trip before they undertake it, they are more likely to reconsider whether to undertake the trip in the first place. You see fuel taxes are essentially pre-payment for future trips, and are not seen as payment for using the road, just an incidental expense of driving. Secondly the mere point that pricing improves congestion is because some motorists have been priced off of driving at that time. To look only at those remaining on the roads, whilst ignoring those who are no longer driving at peak times, seems rather odd.

The fact that those paying get a better trip is good because they will have paid for it. Mees seems to implicitly treat all those driving as undertaking trips which should be deemed as less valuable than those taking public transport. I am unsure how he can sustain such a broad generalisation over those using the roads, particularly since I would guess that in any city with congestion charges, he would no doubt advocate the net revenues from those motorists get used to support other modes. He is in no better position than anyone else to know why a vehicle is on the road, after paying a charge, it could be due to the origin, destination, the time sensitivity of the trip, the driver or passenger being elderly or disabled, or indeed it could be freight. It is all very well pontificating that the freight is being affected by private motorists, but congestion imposes costs upon freight without there being alternatives except changing time of travel. Professor Mees also seems to suggest that it is fairer to have people deterred from driving because conditions are poor rather than because they unwilling to pay what essentially is something akin to the marginal costs they impose on other motorists by driving. Queuing isn't seen as a fair way of rationing most goods and services in a modern liberal democratic mixed capitalist economy, so why should it be so for roads? Particularly when queuing in traffic is not just about wasting time, but about wasting fuel and emitting pollution as you do so! It is also worth noting that traffic congestion imposes other costs on those dependent on emergency services. Lives get lost when ambulances and other emergency vehicles are stuck in congested traffic. Congestion pricing wont eliminate that problem, but it demonstrates that congestion isn't a good thing, it is the breaking down of the efficient use of a scarce and expensive piece of infrastructure.

In addition, what of the traffic for which a mode shift is impossible (e.g. most freight) or so expensive in terms of time, comfort (and price) that it is impracticable (e.g. commutes that would require multiple public transport interchanges or to sites that are too remote for public transport to be viable)?

I understand Mees wanting to promote mode shift for commutes, where that is viable, but congestion is not a policy tool that is economically or environmentally positive. Congestion pricing is about applying the widely used price mechanism to roads, so that demand can reflect supply, and so encouraging others who would otherwise drive at certain roads at certain times to either not drive, drive at different times or take different routes.

Efficient pricing of roads does make driving more attractive, but only at times and places where it is usually now congested for those willing to pay. It means that a scarce resource, road space, is valued by those using it, and the evidence from all cities that have introduced even a fairly blunt form of pricing is that it can encourage people to consider the number of trips, the timing of trips and their modes. Of course, it will mean some of those priced out of the peaks drive anyway, at other times, but this means better utilisation of existing road capacity (without having to build more) and is more fuel efficient and environmentally friendly (as it will be in free flow traffic).

Finally, Mees makes much of what he sees as the importance of rail based transport or dedicated rights of way for public transport to offer a real competitive alternative to private motoring, but many people rely on buses operating on conventional roads and congestion makes them even less attractive than driving. Road pricing can relieve roads sufficient for bus journey times to become reliable and, when compared to driving and paying the price to use the roads, more competitive. Motorists comparing an unpriced drive plus parking to a bus fare, both in congested traffic, to a priced drive plus parking and a bus fare, in free flowing traffic, are more likely to make a different choice, bearing in mind that in many cases, it is simply impractical to build a grade separated rapid transit system or dedicated bus ways.

Allowing traffic in cities to sit congested, wasting time, keeping buses and trucks stuck with cars, wasting fuel, emitting far more noxious pollutants than with free flow traffic, is not a responsible policy from either economic or environmental perspectives. It takes an overly general view that all motorised road transport is negative and should be "punished" by allowing it to essentially fail, when it fact it involves many people and businesses undertaking activities of value to them. Pricing the roads efficiently will mean those who value road space the most will get to use it, at that time, whereas others may drive at different times, mode shift or simply decide that the trip wasn't important enough in the first place.

The strategy by many cities to simply continue to subsidise more supply of public transport, refuse to supply road capacity and hope that this carrot and stick approach is enough, has proven not to be enough. Singapore, Stockholm and now Gothenburg have all made significant dents in traffic congestion thanks to pricing, and a similar impact has occurred in central London, albeit it is less discernible because of the reallocation of road space to other modes. Road pricing alone is not enough in itself, but to deny that it works and to claim traffic congestion and the waste it ensues is positive is quite irrational.

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What is road pricing?

Road pricing is any system that directly charges motorists for the use of a road or network of roads. Traditionally it has meant tolls on single routes, particularly crossings such as bridges or tunnels. More recently it also includes area, cordon and zone pricing of urban areas, and distance and time based charging of whole networks. It does not include fuel or tyre taxes, or taxes on ownership or purchase of road vehicles.

About Me

I have worked over 12 years in public policy and management consultancy in road pricing across the world, focusing on policy, economics, strategy and business case development and revision. If you have any questions, or are seeking consultancy on strategy in road pricing, email me at roadpricing at yahoo dot com You may also follow me on Twitter under the name #roadpricing